30-year Treasury yields surge to 5.33%, the highest since 2007, as deficit concerns and Fed independence questions weigh on bonds.
US Treasury yields climbed to multi-year highs this week, with the 30-year bond yield reaching 5.33%, its highest level since 2007. The 10-year yield also rose above 4.7%, while the 2-year yield hit six-month highs near 4.3% before easing slightly.
Investors are demanding higher returns to hold US debt amid a widening fiscal deficit, which hit $432 billion in July—48% above last year’s level. The deficit is the largest since March 2021, when pandemic relief spending drove it to $660 billion. Markets are also reacting to uncertainty over the Federal Reserve’s commitment to inflation control.
Doubts about the Fed’s independence have intensified after recent policy meetings, with concerns that political pressure could influence rate decisions. The combination of fiscal and monetary policy risks has driven yields higher across the curve.